The battle for Dulux

Paints firm AkzoNobel has received a generous offer, and activists are urging a sale. So why is the firm standing firm? Ben Judge reports.

AkzoNobel, the Dutch maker of Dulux paint, is embroiled in a takeover battle with the US paints giant PPG, which makes Leyland and Johnstone's paints in the UK. In early March, PPG approached Akzo with an offer of €83 per share, compared with Akzo's share price of €65 at the time. Akzo's board declined. PPG came back with an improved offer of €90, which was also knocked back. On Monday, PPG returned for a third time, offering€96.75 in cash and shares, saying, "We are extending this one last invitation to you to reconsider your stance and to engage with us."

Akzo's chief executive, Ton Bchner, responded with a proposal to spin out the company's speciality chemicals arm, pay a special dividend of €1bn and increase its regular payout by 50%. However, that hasn't satisfied shareholders, who are putting Akzo's management under pressure to engage with PPG. Activist hedge fund Elliott Management, which owns about 3.5% of the company, called Bchner's strategy "too ambitious, incomplete and an attempt by senior managers to keep their jobs", while PPG's bid is "a bona fide proposal from a credible counterparty". Threadneedle Asset Management agreed, saying that Akzo "has no more room for excuses and must enter into proper discussions with PPG".

The battle for control is now "spinning into all-out war", says Alex Brummer in the Daily Mail. Elliott, backed by shareholders holding about 17% of Akzo, has called for an extraordinary general meeting with the aim of getting rid of Akzo's chairman, Antony Burgmans. But "if the atmosphere at the Akzo Nobel's annual general meeting in Amsterdam is anything to go by, PPG faces formidable obstacles". Elliott's proposal was greeted with "stony silence", while "the views of smaller investors, many of them worker shareholders, were met with tumultuous applause".

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Yet if Akzo has its shareholders' interests at heart, it's surely "time to talk", says Chris Hughes on Bloomberg Gadfly. PPG's bid price is "well above what would normally facilitate talks", although Akzo might still be able to extract a higher price, perhaps "a clean €100 a share". Indeed, PPG's offer is generous enough that its own shareholders should be asking hard questions, says Olaf Storbeck on The cost savings that PPG expects have a present value of about €5.2bn, yet the latest offer represents an €8bn premium to Akzo's share price before PPG's first bid. "This deal needs more gloss."

Britain's ten most-hated shares

Swipe to scroll horizontally
CompanySectorShort interest on 25 AprilShort interest on 28 March
Wm MorrisonSupermarkets17.41%17.45%
Tullow OilOil and gas16.36%14.25%
DebenhamsGeneral retailers10.23%10.07%
Telit Comm'sTelecoms equip.9.67%10.49%
Marks & SpencerGeneral retailers8.94%8.13%
Ascent Res.Oil and gas8.49%NEW ENTRY
NCC GroupSoftware8.08%NEW ENTRY

These are the ten most unpopular companies in the UK, based on the percentage of stock being shorted (the "short interest"). Short sellers aim to profit from falling prices, so it can be useful to see what they are betting against. The list can also be an indicator of stocks that might bounce strongly on unexpected good news when short sellers are forced out of their positions (a "short squeeze"). Investors are betting that the formerly high-flying cybersecurity business NCC Group is set to tumble further. The company's shares fell by more than 30% in February after it issued a profit warning.

Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website,, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.